All articles tagged with #bubble
Sports Illustrated’s final February Bracket Watch centers the Big Ten in a tight bubble race as four teams sit near the cut line with conference tournaments looming; Duke holds the overall No. 1 seed while Michigan, Arizona, and UConn anchor the other top seeds, and Indiana, UCLA, Ohio State, and USC remain under close watch as the Mountain West bid picture stays unsettled.
The AI boom appears to be softening as software shares retreat from the tech stock rally, raising concerns that an AI-driven bubble may be popping and prompting investors to reassess risk in software equities.
Fortune reports that top economist Owen Lamont says the AI or AI-adjacent stock run isn’t a bubble yet, because the four ‘horsemen’ of a bubble — overvaluation, bubble beliefs, inflows, and issuance — haven’t all aligned. Valuations and frothy sentiment exist, but there’s a surprising lack of IPOs, which Lamont views as the key trigger. A potential mega-cycle could arrive in 2026 if high-profile private firms like SpaceX go public and OpenAI plans an IPO, signaling the era of abundant offerings and possible bubble risk if insiders start selling. The piece contrasts current spending on AI with past bubbles and notes that the market remains expensive but not at dot-com extremes.
Microsoft shares dropped about 12% as investors weigh AI investments and warnings from University of Michigan professor Erik Gordon that AI could be in a large bubble. Gordon says the bubble may persist for months despite ongoing cash inflows, while Microsoft’s cloud business shines even as gaming revenue falls about 9% year over year. Analysts remain bullish overall, with a Strong Buy consensus and an average target near $605, implying roughly 42% upside.
Richard Bernstein, who warned of a tech bubble in 2000, says the Magnificent Seven aren’t as unique as investors think and that market concentration around a few tech names signals a bubble risk. He points to a wide valuation gap between the S&P 500 and its equal-weight index and notes many other growth stocks exist domestically and abroad, including dividend-paying firms. Bernstein favors dividends and non-U.S. stocks, arguing a secular bull market outside the U.S. and that competition for growth should keep multiples in check. His firm, Richard Bernstein Advisors, recently agreed to be bought by Janus Henderson, with Bernstein joining as global head of macro & customized investing.
DeepMind chief Demis Hassabis warned that AI investment looks bubble-like, urging realistic expectations about near-term returns while acknowledging the technology's long-term potential.
Bridgewater warns that Big Tech's reliance on external capital to fund AI expansion is risky, potentially leading to a bubble due to rising costs, soaring valuations, and increased market concentration, with concerns about sustainability and profitability.
Quantum computing stocks like Rigetti and D-Wave have soared over 1,900% in a year despite limited real-world applications and no significant revenue, fueling speculation about a bubble driven by hopes for revolutionary technology, with concerns about their high valuations and market volatility.
Financial leaders and institutions are warning of asset bubbles and increased risks of a market correction, suggesting that Wall Street may not anticipate the next crash due to widespread exuberance and overvaluation.
Many economists and analysts fear that the current market conditions resemble the 1929 crash, citing signs of a bubble, high valuations, and economic vulnerabilities, raising concerns about a potential severe downturn similar to the Great Depression, despite some optimism and technological advancements.
The article argues that concerns about AI being a bubble are misplaced, comparing it to past tech bubbles that ultimately led to significant societal benefits, and suggests that even if investors face losses, the public is likely to benefit from AI's long-term importance.
Andrew Ross Sorkin compares today's market conditions to the 1929 bubble, highlighting similarities like technological hype, increased access for average investors, and regulatory rollbacks, while expressing concern that current exuberance could lead to a crash similar to the Great Depression, despite regulatory improvements since 1929.
CNBC's Andrew Ross Sorkin warns that the current stock market, driven by AI and speculative bubbles, shows parallels to the 1929 crash, raising concerns about an impending financial meltdown due to overvaluation, deregulation, and risky private investments.
The article explores whether the current surge in datacenter investment driven by AI is a bubble, drawing parallels to historical infrastructure booms like railroads and fiber optics. It discusses potential outcomes, including the possibility of unused infrastructure ('dark datacenters') if AI demand falters, and highlights the potential for these investments to lead to new power generation capacity, especially in renewable energy. The piece emphasizes that while some infrastructure may become obsolete, the investments could still benefit the energy sector, particularly if they spur advancements in power generation technology.
Andrew Ross Sorkin discusses the current speculative environment and compares it to the 1929 stock market crash, highlighting lessons from history and the similarities and differences in market exuberance.